Stanford vows tighter controls over research spending

July 23, 1991|By San Francisco Chronicle

PALO ALTO, Calif. -- Stanford University vowed yesterday never to be embarrassed again by revelations of overcharging the government for research and unveiled a 35-point program to reform its accounting practices.

The university promised tighter controls over what it charges the government for costs of doing research, stepped-up training of researchers and university employees to spot "unallowable" bills and guarantees to protect campus whistle-blowers who suspect wrongdoing in government contracts.

"We want to make sure it never happens again, and at the same time we want to extricate ourselves from the past," Peter Van Etten, Stanford's new chief financial officer, said yesterday.

Stanford is adopting accounting procedures as tough as those now imposed by the government on defense contractors, Mr. Van Etten said.

The new measures will mean "several million dollars" more in expenses for Stanford in keeping track of its federal research bills.

The university's reputation has been heavily tarnished by events of the past year, officials conceded.

In a series of investigations by federal agencies and a congressional subcommittee, government auditors said that during the 1980s, Stanford may have overbilled taxpayers as much as $150 million for such dubious expenses as depreciation on a yacht, upkeep of Stanford Shopping Center, parties and maintenance of the homes of school administrators, including President Donald Kennedy.

"There will be no more administrators' houses and yachts," said Mr. Van Etten.

The university will implement new "front-end screening" procedures and a system of tightened checks and balances to prevent questionable bills from being submitted in the first place.

Mr. Van Etten told a campus news conference that university trustees and administrators are now "determined to re-establish Stanford's reputation for integrity and sound management," and to regain the trust of the Office of Naval Research, which monitors $240 million in federal research projects at the campus in Palo Alto.

In April, the Navy, under apparent pressure from Congress, cut from 70 percent to 55 percent the rate at which Stanford is reimbursed for what are known as "indirect costs" of research, such as libraries, buildings and utilities, which cannot be charged to any one project.

Stanford may lose as much as $20 million in annual rebates of research expenses from the government because of the sharp reduction in the rate.

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